Shale boom may create jobs in nonfracking states: Report

A natural gas drilling rig in Fairfield Township, Pennsylvania. The area sits above the Marcellus Shale where the search for natural gas uses a controversial method known as hydrofracking.

At least for the moment, New York and California aren't part of the U.S. shale explosion. Yet according to a new study, they may reap the benefits nonetheless.

The American Petroleum Institute, an oil and gas industry group that favors fracking, released on Thursday a state-by-state analysis detailing how plentiful natural gas supplies could help create millions of direct and indirect jobs across the country. Interestingly, some of those jobs may appear in unlikely states that are not active participants in the shale boom.

By 2035, the boom will contribute between $5 billion and $31 billion each to states actively producing natgas, such as Texas, Louisiana and Pennsylvania, the API's analysis says. The study is one of the few available that offers detailed projections on natgas-related jobs in specific states.

As the federal government moves to greenlight liquefied natural gas (LNG) terminals to ship stockpiles abroad, states that are ground zero for these facilities can expect "significant job growth," according to Kyle Isakower, API group vice president for policy and economic analysis.

The more than 20 LNG terminals currently proposed or under construction represent "a multibillion-dollar investment," Isakower said on a conference call. "America is in a global race" to build up its natural gas industry and attract investment. "Fortunately, U.S. workers are in a very good position to win that race."

The study, however, makes some rosy assumptions about the spillover effects for states not directly involved in hydraulic fracturing, or fracking. The practice is vigorously opposed by environmental groups, which have fought to restrain or ban the activity in environmentally friendly states.

New York—which currently has a moratorium on the process—and California are among those the study said would see an upswing in jobs and revenue associated with natural gas exporting. (Read more about why New York is opposed to fracking here.) The study says these nonfracking states will benefit largely from a rise in manufacturing and services jobs derived from natural gas production.

According to the API study, the Empire State could see anywhere between $800 million and $5 billion in LNG-related income by 2035, depending on how much is exported. That could add as much as 25,000 new jobs in the state, the report said.

Meanwhile, California—which recently imposed new regulations on the fracking industry, but doesn't have an outright moratorium or ban on the practice—could reap a revenue windfall between $1 billion and $5 billion, API's report said. That could yield as much as 39,000 new jobs in a state where unemployment hovers near 9 percent, well above the national rate.

Naturally, the biggest rewards in terms of jobs and revenue will go to natgas powerhouses. Texas—location of the Eagle Ford shale deposit—may see anywhere between $5.2 billion and $31.4 billion in revenue and at least 28,000 new jobs by 2035, depending on how much LNG is exported, the API's study said. Pennsylvania, which is home to the booming Marcellus Shale, may take in as much as $10.3 billion and create 59,000 new jobs, the report said.

Other states poised to benefit from LNG exports are Alaska, which the API study says could have more than 36,000 new jobs; Illinois, which could see upward of 17,000 positions; and Arkansas, which could see more than 18,000 jobs.